India - Judiciary in Enforcing Contracts - Ease of Doing Business -2

The "Enforcing Contracts" indicator in the Ease of Doing Business rankings measures the efficiency and quality of judicial processes in resolving commercial disputes. This indicator is crucial for businesses as it reflects the reliability and effectiveness of the legal system in upholding contractual agreements.

The efficiency of courts continues to vary greatly around the world. Enforcing a contract through the courts can take less than 10 months in Singapore, New Zealand and Rwanda but almost four years in Bangladesh and India. And the cost of doing so ranges from less than 10% of the value of the claim in Iceland, Luxembourg and Norway to more than 80% in economies such as Burkina Faso and Zimbabwe. In three economies (Cambodia, Papua New Guinea and Timor-Leste), the cost of resolving a standardized dispute through local courts exceeds the value in dispute, indicating that litigation may not be worth it at all. Why it matters in Enforcing Contracts - Doing Business - World Bank Group

The Indian judicial system faces a significant backlog of cases, which delays the resolution of disputes. This backlog is exacerbated by the limited number of judges and inefficiencies in case management.

Niti Aayog, had estimated in 2018 that the 29 million pending cases (the figure then) would take 324 years to resolve at the then pace of case resolution.

As of May 2022, Over 47 million cases pending in courts: clogged state of Indian judiciary? - across different levels of the judiciary. Of them, 87.4% are pending in subordinate courts, 12.4% in High Courts, while nearly 1,82,000 cases have been pending for over 30 years.

Till November 2024, '5 crore cases’: India's judiciary collapsing under weight of huge backlog The data indicates that it takes an average of 15 years for a civil case to reach a conclusion in the Supreme Court, while criminal cases can take around 8 years.

HC NJDG - National Judicial Data Grid

The Unsettling Consequences of Justice Delay in India: A Grave Situation with Alarming Data demands urgent attention and effective solutions.

This backlog in India's judiciary significantly impacts citizens' rights in several ways:

Delayed Justice: The adage "justice delayed is justice denied" aptly describes the situation. Long delays in court cases mean that individuals often wait years, or even decades, for their cases to be resolved1. This can be particularly devastating for those seeking justice in critical matters like property disputes, family law cases, and criminal trials.

Erosion of Trust: Prolonged delays erode public trust in the judicial system. When people lose faith in the courts' ability to deliver timely justice, it undermines the rule of law and can lead to increased reliance on extrajudicial means.

Violation of Fundamental Rights: Delays can result in the violation of fundamental rights, such as the right to a fair trial and the right to personal liberty. For instance, individuals awaiting trial may spend years in pre-trial detention, which is a significant infringement on their rights.

Economic and Social Costs: The backlog imposes economic and social costs on individuals and society. Prolonged litigation can drain financial resources, cause mental stress, and disrupt lives.

Impact on Vulnerable Groups: The economically disadvantaged, are disproportionately affected by judicial delays. They often lack the resources to navigate the legal system effectively and are more likely to suffer from prolonged legal battles.

Examples:

Criminal Cases: In criminal cases, the accused may remain in jail for years without a trial, violating their right to a speedy trial.

Civil Disputes: In civil disputes, such as property or family law cases, the prolonged wait can lead to financial hardship and emotional distress.

Addressing the backlog is crucial to ensuring that citizens' rights are protected and that justice is delivered in a timely manner.

The accumulation of pending cases in legal systems can be attributed to the exponential development of human civilization across multiple domains be it the growth of the global population, or societal complexity driven by advancements in technology, economics, governance, and social structures. All have led to more intricate legal issues that require extensive legal proceedings. Another factor contributing to the mounting load of cases is the improved access to justice and legal empowerment of individuals and marginalized groups. Legislative expansion, aimed at regulating various aspects of modern life, has generated a broader scope for legal disputes. Additionally, economic development, globalization, and technological advancements have all given rise to complex legal matters cases related to cybercrimes, intellectual property rights, privacy concerns, and digital transactions have emerged, requiring specialized knowledge and contributing to the backlog. Overall, these factors collectively challenge the capacity of the judicial system to handle the growing number and complexity of cases, resulting in the mounting load of pending cases. THE MOUNTING BACKLOG OF CASES: A BARRIER TO JUSTICE - The Amikus Qriae

44 Years Too Late: Karnataka High Court Quashes State's Oldest Criminal Case to Save Judicial Time noting: “If the afore-narrated facts are noticed, the impossibility of conviction of the petitioner looms large. Therefore, if acquittal is eminent in a trial, permitting such trial against the accused would be nothing but waste of precious judicial time as is observed hereinabove. Therefore, in the considered view of this Court, permitting a trial, which would be of no utility would only be an exercise in futility. Thus, ends the oldest case, in criminal justice system, of the State, perhaps, which is 44 years old.”

In navigating India’s judicial landscape, it is evident that the pendency of cases is a complex web of challenges. Addressing this requires a holistic approach that tackles various facets of the challenge, from addressing judge shortages to streamlining legal procedures. By adopting comprehensive reforms and reshaping the foundations of justice delivery, India can pave the way for a fairer and more equitable legal system.

Impact on Ease of Doing Business:

Judicial delays have a profound impact on businesses in several ways:

1. Uncertainty and Risk: Prolonged legal disputes create uncertainty, making it difficult for businesses to plan and make informed decisions. This uncertainty can deter investment and expansion.
2. Increased Costs: Legal delays lead to higher litigation costs, including legal fees, court fees, and other related expenses. These costs can be substantial, especially for small and medium-sized enterprises (SMEs).
3. Cash Flow Issues: Businesses involved in prolonged legal battles may face cash flow problems, as funds are tied up in litigation rather than being available for operational needs.
4. Reputation Damage: Ongoing legal disputes can harm a company's reputation, affecting relationships with customers, suppliers, and investors.
5. Contract Enforcement: One of the critical factors in the Ease of Doing Business index is the efficiency of contract enforcement. Delays in enforcing contracts undermine the reliability of business agreements. This can lead to breaches of contract and a lack of trust in the legal system to uphold business rights.
6. Economic Impact: Judicial delays can slow down economic growth by creating a less favorable business environment. This can result in reduced foreign investment and hinder overall economic progress.
7. Investment Deterrence: Prolonged legal disputes and the inability to resolve issues quickly deter both domestic and foreign investors. Investors seek a stable and predictable legal environment, and judicial delays undermine this confidence.
8. Operational Disruptions: Ongoing legal disputes can disrupt business operations, affecting productivity and profitability. For example, property disputes can prevent businesses from utilizing their assets effectively.

The 1984 Bhopal gas tragedy highlights the negative impact of delayed justice. Victims remained in legal limbo for years after the accident, hoping for recompense and justice. The 1989 compensation settlement of $470 million was inadequate for the magnitude of the disaster. Legal actions for compensation and criminal culpability have been ongoing for decades, with little results. Prolonged delays in making Union Carbide accountable, along with poor legal actions, exacerbated the suffering of survivors. The case highlighted the impact of legal delays in holding corporations accountable and delivering relief to victims of large-scale disasters. Judicial Delays In India: A Growing Concern ? Lawful Legal